SM Prime Holdings Inc. posted a 12-percent increase in core net income for the first half of the year, driven by the efforts to expand outside of Metro Manila.
In a disclosure to the Philippine Stock Exchange on Mon day, SM Prime noted an income of P12.6 billion in January to June, up 12 percent from P11.2 billion a year earlier.
“This was supported by a 9 percent increase in consolidated revenues to P39.2 billion from P35.9 billion in the first half of 2016,” SM Prime said.
SM Prime President Hans Sy attributed the firm’s financial results to its provincial expansion.
“SM Prime’s integrated development program in the Philippines that is geared more towards provincial expansion sustained its financial performance in the first half of the year,” Sy said in a statement.
Mall revenues accounted for 60 percent of the consolidated revenues at P23.6 billion, a 9 percent increase from P21.7 registered year-on-year.
Operating income from malls increased by 9 percent to P13.2 billion, sustaining the firms operating income margin of 56 percent.
SM Prime has 58 malls in Philippines and six in China, with a total gross floor area (GFA) of 8.5 million square meters.
“The company is scheduled to open two more malls this year, namely Cherry SM Congressional in Quezon City and SM City East Ortigas in Pasig City. SM Prime is also expanding SM Center Molino in Cavite and SM City San Pablo in Laguna this year,” the disclosure noted.
Mall operations in China expanded by 8 percent to P2.1 billion from P1.9 billion.
“Operating income, likewise, improved by 11 percent to P1.1 billion,” SM Prime reported.
“The China malls posted an operating income margin of 51 percent from 50 percent of the same period last year.”
The residential group posted a 6-percent revenues growth to P13.2 billion from P12.5 billion, accounting for 34 percent of consolidated revenue in the first half of 2016. Operating income amounted to P3.9 percent from P3.7 percent, up 5 percent.
In the second half of the year, the residential group aims to launch 6,000 to 8,000 units in the cities of Quezon, Pasay, and Tagaytay, and economic housing in the provinces of Bulacan, Cavite, and Cabanatuan.
The Commercial Properties Group posted a 51-percent increase in consolidated revenue to P1.1 billion.
Operating income of the commercial unit jumped 68 percent to P762.8 million.
“The significant growth is boosted by the opening of SM Cyber West in Quezon City and Five E-Com Center in Pasay City, with a combined GFA of 171,000 sqm. These office buildings have an occupancy rate of 100 percent and 99 percent, respectively,” SM Prime said.
“SM Prime remains committed to its role as a catalyst for economic growth, delivering innovative and sustainable lifestyle cities, thereby enriching the quality of life of millions of people,” the company said.